NEFCO S Cleaner Production Facility

Transcription

1 NEFCO S Cleaner Production Facility Nordic Environment Finance Corporation

2 Terms and conditions Cleaner Production Facility The NEFCO Cleaner Production Facility, which was established in 1996, is a loan programme, which sorts under the Nordic Environment Development Fund (NMF). The Facility is intended to promote the reduction of industrial pollution through efficient resource and energy utilization. The overall objective of the facility is to utilize positive examples of win-win projects in order to instill a mindset compatible with sustainable forms of production in industry and other sectors. The main criterion for each project approved under the scheme is that it should generate clear and measurable environmental benefits. Cleaner production is generally achieved by upgrading technology and production methods. Currently the Nordic Environment Development Fund (NMF), has funds in excess of EUR 60 million and has approved over 200 projects since its inception. LENDER BORROWER ELIGIBILITY CRITERIA LOAN AMOUNT MAXIMUM REPAYMENT PERIOD PAYBACK PERIOD OF INVESTMENT INTEREST RATE CURRENCY SECURITY DISBURSEMENT REPAYMENT SCHEDULE LEGAL DOCUMENTATION AND MONITORING Nordic Environment Finance Corporation (NEFCO). Private or public enterprise from Russia, Ukraine or Belarus. Modernization or reconstruction of existing production facilities and processes to generate positive environmental effects using proven technological techniques. Maximum loan amount EUR 500,000 with NEFCO capable of financing up to 90% of total project cost. Up to 5 years. Up to 4 years. Project payback is calculated by dividing the total project cost with the anticipated annual cost savings generated from it. Fixed at 6% per annum (in EUR) and 9% per annum (in RUB ) and tied to the duration of the loan. No commission or other fees. EURO and Russian Rubles. 125% of the loan amount. Property, equipment, bank or municipal guarantees accepted. The loan is disbursed to the borrower s account in three tranches according to the project implementation schedule and respective contractual obligations of the borrower. NEFCO can directly disburse to the borrower s approved bank. The loan shall be repaid in equal quarterly installments with the first payment being commenced approximately 3 months after project completion. Payments have to be made to NEFCO s bank account in Helsinki. Processing of legal documentation for the loan and costs of monitoring are covered by NEFCO. NEFCO offers Cleaner Production loans on favourable terms to both private and public enterprises and loan repayments are directly linked to savings generated from the investment. BORROWER COSTS PROCUREMENT DURATION OF PROCESS Preparation of business plan, registration, insurance and valuation of pledged assets. Procurement of goods and services financed by NEFCO shall be open and fair. The process from application to the first disbursement of the loan can take up to 6 months. Nordic Environment nt Finance Corporation rat

3 Examples of NEFCO-financed Cleaner Production (CPF) projects Case 1 Customer: Wood working factory Project description: New wood- waste boiler house and wood-drying chambers Investment EUR 349,000 NEFCO share EUR 296,000 Annual savings: EUR 140,000 Payback period = 2.5 years Case 5 Customer: Farm Project description: Installation of a bio-diesel production plant using rapeseed Investment EUR 285,000 NEFCO share EUR 175,000 Annual savings: EUR 73,000 Payback period = 3.9 years Case 2 Customer: Ancillary power generation plant Project description: Installation of gas -driven CHP (Combined Heat and Power) for the investor s own power requirement and sale of heat to a public swimming pool at the district heating utility Investment EUR 385,000 Annual savings: EUR 109,000 Payback period=3.5 years Case 3 Customer: Power generation plant Project description: Renovation of 5 boiler houses supplying heat to a hospital, polyclinic, kindergarten and secondary school through an ESCO arrangement Investment EUR 558,000 Annual savings: EUR 242,000 Payback period = 2.3 years Case 4 Customer: Bakery Project description: Replacement of baking oven Investment EUR 450,000 Case 6 Customer: Electric-bulb production company Project description: Installation of new glass melting oven Investment EUR 349,000 NEFCO share EUR 315,000 Annual savings: EUR 100,000 Payback period = 3.5 years Case 7 Customer: Biscuit factory Project description: Replacement of oven gas burners Investment EUR 390,000 Annual savings: EUR 131,500 Payback period = 3 years Case 8 Customer: Margarine factory Project description: Installation of energy efficient edible fats and oils production plant Investment EUR 430,000 Annual savings: EUR 112,460 Payback period = 3.8 years Annual savings: EUR 112,000 Payback period = 4.0 years

4 The application process Distribution of CPF-loans managed by NEFCO Project proposal A short two-page project proposal conforming to a standardized format is submitted to NEFCO. Business plan After NEFCO has assessed the project proposal and approved it, the applicant is asked to present a business plan, which is examined by NEFCO s Investment Committee. The decision on whether the loan application is approved or not normally takes about one month. Industry 57% Energy 17% Due diligence made by NEFCO consultants The applicant is requested to supply a documentation package, which will be analyzed by NEFCO consultants. Waste 4% Other 9% Loan agreement If the project proposal and the business plan are approved, NEFCO and the borrower sign a loan agreement. A pledge/ guarantee agreement is also normally signed at this stage. Agriculture 13% Loan disbursement Upon fulfilment of all the required conditions by the borrower, the loan is disbursed in three tranches. Environmental, financial, legal reporting The borrower is required to supply annual reports on the project s environmental effects, the financial state of his company and other relevant information. Nordic Environment nt Finance Corporation rat

5 Energy efficient production of glass bulbs in Lviv The Ukrainian company Iskra has, with the help of a loan from NEFCO, modernized its smelting furnaces. These measures are saving the company some 890,000 m3 of gas per year. This has allowed the company to make savings worth EUR 180,500 per year. Smelting furnaces are needed to make glass bulbs and domes. The investment is expected to reduce carbon dioxide emissions by around 452 tonnes per year. With 2,200 employees, OJSC Iskra is one of the largest employers in the Lviv region in Western Ukraine. Iskra manufactures nearly 230 million incandescent lamps per year, with most of the production exported to a total of 33 countries. Iskra makes over 300 different products from fluorescent tubes and incandescent bulbs to car lights, halogen lamps and street lighting systems. Today, approximately 12 per cent of all the lamps made by Iskra are lowenergy light sources. In Ukraine, the company markets its products under the name of Iskra whereas the brand used in most EU countries is Volta. Rapeseed in the fuel tank Shevchenko Farmer Enterprise employs around 130 people in Rivne, 2.5 hours drive east of Lviv, in Western Ukraine. The company has used a loan from NEFCO to finance conversion of rapeseed into oil that is subsequently used as bio-diesel fuel in the company s tractors, harvesters and other vehicles. Refuelling a vehicle with fossil diesel at a filling station costs 70 to 80 euro cents per litre. But the price of bio-diesel made from the rapeseed or sunflower that we grow in our own fields is only 27 to 30 cents per litre. We save up to EUR 30,000 per year by refuelling with renewable bio-diesel, says the company s CEO Victor Atamanyuk. About 200 hectares of the company s arable land is used for growing rapeseed which yields an annual harvest of almost 450 tonnes. One tonne of rapeseed will give an average of 350 kg of oil, which results in an annual production of 150 tonnes of bio-diesel. Rapeseed satisfies 75 per cent of the company s fuel requirement, including the executive management s cars. A tour of the farm shows that all the local resources are put to full use. Pressing of the dried rapeseed yields by-products such as stems and other biomass that can be pelletized and incinerated to produce heat. Part of the stems is also used as animal feed for cows. And surely, the company s carbon footprint is reduced by the bold investment in local renewable fuels. The project is estimated to decrease carbon dioxide emissions by at least 3,600 tonnes per year.

6 Replacement of furnaces in St. Petersburg Neva Ferrit Ltd, headquartered in St. Petersburg in Russia, is a subsidiary of Ferropribor which manufactures a wide range of ferromagnetic products for the Russian metal industry. NEFCO s loan enabled the company to purchase a new furnace. It was installed the very same year as the loan was disbursed, replacing thirteen old furnaces. The finance was provided from NEFCO s Facility for Cleaner Production. This investment reduced Neva Ferrit s carbon dioxide emissions by approximately 430 tonnes per year from the time that the new furnace became operational. And, thanks to lower energy consumption, Neva Ferrit Ltd now saves about EUR 179,000 per year, which enabled it to comfortably service its NEFCO loan. The total investment cost of this project was EUR 490,000. From heating oil to natural gas NEFCO s Facility for Cleaner Production has financed a comprehensive project involving the modernization of 16 boiler plants in the vicinity of St. Petersburg. The aim of the project was to improve the overall heat-supply and stability in the Volosovksy district located in the Leningrad region. NEFCO s loan was earmarked for the refurbishing of two boiler houses together with the Russian company, BaltKotloMash LLC. Other financiers included the Danish companies Dantrim, Eurotherm and the Danish environmental ministry. In practice, the investment was targeted at a transition from heavy fuel oil or coal to natural gas, which reduced the emission of carbon dioxide by about 105,000 tonnes per year. NEFCO s share of the emission reductions is 9,700 tonnes per year. Apart from environmental benefits, the project has also generated substantial savings for BaltKotloMash LLC. The total savings of the fuel switch and retrofitting of the installed equipment is EUR 302,000 per year. The investment has also improved the air quality in towns affected by the project. The transition from heating oil to natural gas also means reduced emissions of sulphur and soot particles, says NEFCO s Senior Manager Karl-Johan Lehtinen.

7 The Nordic Environment Finance Corporation (NEFCO) is an international finance institution, which was established in 1990 by the five Nordic countries, Denmark, Finland, Iceland, Norway and Sweden. NEFCO finances a wide range of environmental projects in Eastern Europe, mainly in Russia, Ukraine and Belarus in order to generate positive environmental benefits for the Nordic region. NEFCO provides financing for projects aimed at reducing environmentally harmful emissions and discharges, such as greenhouse gases and toxic pollutants. Currently, NEFCO s project portfolio of approved projects contains over 400 projects. Contacts For further information, please contact: Russia Vitaly Artyushenko Chief Investment Adviser Mob Alexander Boldyrev Technical Adviser Mob Nordic Environment Finance Corporation Address: Nevsky Prospekt 21 Office 517 Saint Petersburg, Russia Office: Ukraine Julia Shevchuk Chief Investment Adviser Mob Andriy Katashov Technical Adviser Mob Nordic Environment Finance Corporation Address: Velyka Vasylkivska Street, building 23-B, section B, offices 212. Kiev, 01601, Ukraine Office: NEFCO Head office Fabianinkatu 34 - P.O. Box 241, FI Helsinki, Finland - Tel (0) Photos: Patrik Rastenberger. This brochure has been printed on FSC-certified paper. Nordic Environment Finance Corporation